More results in Alanar case as second of three brothers finalizes guilty plea

INDIANAPOLIS (May 4, 2011) Indiana Secretary of State Charlie White is applauding another success of his Securities Division’s Prosecution Assistance Unit and local authorities. Chris Reeves, the middle brother, and part owner of Alanar and related ventures, pled guilty today to ten counts of aiding and abetting securities fraud. The plea happens in exchange for an eight year sentence with two years probation. Investors in Alanar church bonds and churches were misled in the sale of the bonds. The ten counts of fraud related to ten different church bonds that left over 3,000 people, mostly church members and churches, with losses in excess of fifteen million dollars.

Alanar, the holding company owned by Vaughn Reeves and his sons Josh, Chris, and Chip (Vaughn, Jr.) sold bonds to finance church construction and then shuffled money to cover losses without telling investors or the churches in what has been termed a modified Ponzi scheme. The investigation and subsequent criminal charges against father and sons was a collaborative state effort with the Sullivan County Prosecutor’s Office, the Indiana State Police, and the Secretary of State’s Prosecution Assistance Unit. This effort followed a federally imposed receivership of Alanar that began in 2005.

This plea follows an October 2010 trial where a Princeton jury found Chris’s father, Vaughn Reeves, an ordained minister and founder of Alanar, guilty of nine counts of fraud, resulting in a prison sentence of 54 years. In February 2011, younger brother Josh also pled guilty to all ten counts and received a six year sentence with probation. The last and oldest brother, Chip, is set for trial on June 14, 2011.

“Hoosiers should be on the lookout for this type of ‘affinity fraud,’” White said. “When promoters of unlawful investments prey on people of the same faith, our office will be here to help bring them to justice.”

The Prosecution Assistance Unit was created within the Enforcement Section of the Securities Division to assist law enforcement agencies in prosecuting white collar criminals. Currently the unit includes two attorneys and two investigators devoted exclusively to the enforcement of the criminal provisions of the Indiana Securities Act, the Indiana Loan Broker Act and related statutes. The Unit operates under the direction and supervision of the Securities Commissioner and the Senior Investigator.